Nicox — Denali trial remains on track for 2025 readout

Nicox (Euronext Growth: ALCOX)

Last close As at 18/05/2024

EUR0.37

−0.01 (−1.32%)

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Research: Healthcare

Nicox — Denali trial remains on track for 2025 readout

Nicox has provided a preliminary Q223 update, with net revenue (primarily consisting of net royalties attributable to net sales of Vyzulta by global licensee Bausch + Lomb, or B+L) of €0.9m, up from €0.7m in Q222. Total US Vyzulta prescriptions grew 26% in Q223 (vs 23% in Q122 and 25% in Q422). Importantly, the company reiterated its guidance that it expects to complete the Denali study in 2025. Denali is the company’s second Phase III study assessing lead candidate NCX-470, a nitric oxide (NO) donating bimatoprost, in the treatment of elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension (OHTN). Denali enrolment and randomisation is around 55% complete, which provides us with confidence that the company will complete the trial within the currently anticipated timeline. We continue to anticipate that NCX-470 could reach commercial launch in 2027. Nicox reported €19.0m in gross cash at 30 June (vs €27.7m at 31 December 2022), and expects its cash runway should fund its operations into June 2024, based on the development of NCX-470 alone.

Written by

Pooya Hemami

Analyst - Healthcare

nicox01

Healthcare

Nicox

Denali trial remains on track for 2025 readout

Q223 highlights

Pharma and biotech

21 July 2023

Price

€0.44

Market cap

€22m

$1.11/€

Net debt (€m) at 30 June 2023

1.4

Shares in issue

50.2m

Free float

90%

Code

ALCOX

Primary exchange

Euronext

Secondary exchange

N/A

Share price performance

Business description

France-based Nicox develops therapeutics for the treatment of ocular conditions. Its lead candidate NCX-470 is in Phase III studies for the treatment of glaucoma, and it is advancing NCX-4251 for dry eye disease. Nicox also receives licence revenue for its FDA-approved drugs Vyzulta and Zerviate.

Analysts

Pooya Hemami, OD MBA CFA

+1 643 653 7026

Soo Romanoff

+44 (0)20 3077 5700

Nicox is a research client of Edison Investment Research Limited.

Nicox has provided a preliminary Q223 update, with net revenue (primarily consisting of net royalties attributable to net sales of Vyzulta by global licensee Bausch + Lomb, or B+L) of €0.9m, up from €0.7m in Q222. Total US Vyzulta prescriptions grew 26% in Q223 (vs 23% in Q122 and 25% in Q422). Importantly, the company reiterated its guidance that it expects to complete the Denali study in 2025. Denali is the company’s second Phase III study assessing lead candidate NCX-470, a nitric oxide (NO) donating bimatoprost, in the treatment of elevated intraocular pressure (IOP) in patients with glaucoma or ocular hypertension (OHTN). Denali enrolment and randomisation is around 55% complete, which provides us with confidence that the company will complete the trial within the currently anticipated timeline. We continue to anticipate that NCX-470 could reach commercial launch in 2027. Nicox reported €19.0m in gross cash at 30 June (vs €27.7m at 31 December 2022), and expects its cash runway should fund its operations into June 2024, based on the development of NCX-470 alone.

Year end

Revenue
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/21

8.6

(15.5)

(0.32)

0.0

N/A

N/A

12/22

5.2

(18.3)

(0.34)

0.0

N/A

N/A

12/23e

6.6

(19.8)

(0.39)

0.0

N/A

N/A

12/24e

7.6

(22.4)

(0.44)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. Revenue figures reflect gross revenues.

Nicox has pushed back the timing of its two planned Phase IIIb studies, which we discussed in more detail in our November update note, intended to potentially strengthen NCX-470’s competitive profile versus other prostaglandin F2α (PGA) and topical drug treatments for glaucoma. One of these studies, Whistler, is designed to assess NCX-470’s dual mechanism of action (NO release and PGA) on IOP lowering, and is now expected to start in H223. The other Phase IIIb study, aiming to assess the drug’s possible retinal blood flow effects using optical coherence tomography angiography, is now expected to start in 2024. Each of these studies are expected to take about one year to complete and were previously guided to start in Q222. As all of the clinical data required for the regulatory New Drug Applications (NDAs) in the US and China are covered by existing and prior NCX-470 studies (primarily the Mont Blanc and Denali Phase III trials), the read-out timelines from these two studies are not expected to influence the timing of the approval of NCX-470. Further, data from these studies, which could be supportive of NCX-470’s competitive profile, are still expected to be released well before product launch.

We remind readers that Nicox is entitled to tiered net royalties of 6–12% on net Vyzulta sales through its arrangement with B+L, which takes into account the Vyzulta-related royalties that Nicox must pay to Pfizer. Nicox has not yet reported Q222 gross royalties or the amount of royalty revenue it paid to Pfizer, but we note that in FY22 it paid €2.0m in royalties to Pfizer (€0.9m in H122) and hence the annualised Q222 net revenue results are broadly in line with our unchanged estimate of €5.8m in gross FY23 Vyzulta royalty revenue (our €6.6m FY23 total revenue estimate also includes other licence and collaboration revenue).

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This report has been commissioned by Nicox and prepared and issued by Edison, in consideration of a fee payable by Nicox. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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General disclaimer and copyright

This report has been commissioned by Nicox and prepared and issued by Edison, in consideration of a fee payable by Nicox. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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